"We have a market that appears to be a little nervous," said John Wilson, chief technical strategist at Morgan Keegan. "It still wants to move up, but there's been some disappointment about the rise in rates and drops in mortgage applications."

After a three-month run up, stocks ended little changed last week, although the Dow industrials and the S&P 500 did manage to eke out small gains.

The 10-year note yield hit 4% last week for the first time since October, as investors pulled money out of government debt. That sent mortgage rates up, which could stymie the housing market's path toward stabilization. Add a weak dollar, rising oil and gas prices and trillions of dollars in government stimulus flooding the system -- and worries about inflation are starting to surface.

This week's string of reports include housing starts and building permits, wholesale and consumer inflation, manufacturing and the labor market. Investors will also keep close watch on the bond market.

Most of the economic reports due are expected to show a moderate improvement over the previous reading, a trend in the economic news over the last few months that has helped propel stocks. But a slight improvement in the monthly reports is not to say a recovery is yet taking hold.

"What we've seen recently has reflected an end to the paralysis and panic phase of the cycle in the five or six months since Lehman's collapse," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.

"Things aren't as bad as they were, but that period was an aberration in terms of the pace of the slowdown," he said. "We're now back to the grind."

The Dow has now risen in 12 of the last 14 weeks, gaining nearly 33% for its best run since March 1975. The S&P 500's gain in 12 of the last 14 weeks is the best since the 1930s. Even so, the Dow ended Friday's session just barely higher for 2009, while the S&P 500 is up less than 5% year-to-date.

For stocks to move a lot higher, investors are going to need to start to see reports that show a recovery taking hold, not just the pace of a slowdown waning, the analysts said.

Monday: The Empire State index, a measure of manufacturing in the New York area, is expected to have worsened to negative 5.1 in June from negative 4.6 in May, according to a consensus of economists surveyed by Briefing.com. Any reading below zero shows the sector is contracting.

Health care will be in focus Monday. President Obama speaks about reform to the American Medical Association in Chicago. Also the Congressional Budget Office releases its estimates on the Kennedy health bill. The CBO's estimates are key since they are used by Congress in making legislative decisions.

Tuesday: May housing starts and building permits, from the Census Bureau, are both expected to show a slight improvement from earlier levels, as the housing market edges closer to stabilizing.

Housing starts are expected to have risen to a 483,000 unit annual rate in May from a 458,000 unit annual rate in April. Building permits, a measure of builder confidence, is expected to have risen to a 500,000 unit annual rate in May from a 498,000 unit annual rate.

The Producer Price Index (PPI), a measure of wholesale inflation, is expected to have risen 0.6% in June after rising 0.3% in May. The so-called core PPI, which strips out volatile food and energy prices, is expected to have risen 0.1% in June after rising 0.1% in May.

The Federal Reserve releases its reports on industrial production and capacity utilization shortly before the start of trading.

Wednesday: The Consumer Price Index (CPI) for May is expected to fall 0.9% after falling 0.7% in April. So-called core CPI, which strips out volatile food and energy prices, is expected to have risen 0.1% after rising 0.3% in May.

The first-quarter current account balance and the weekly oil inventories report are also on tap.

FedEx (FDX, Fortune 500) reports quarterly results in the morning. The package delivery company, often seen as a proxy for the health of the economy, is expected to have earned 52 cents per share versus $1.45 a year ago.

Thursday: The weekly jobless claims report from the Labor Department is due before the start of trading. The number of Americans filing new claims for unemployment is expected to have risen to 610,000 from 601,000 in the previous week.

The May index of leading economic indicators is due shortly after the start of trading. LEI, from the Conference Board, is expected to have risen 0.9% after rising 1% in the previous month.

Treasury Secretary Timothy Geithner testifies before the House Financial Services Committee about how the Obama administration plans to restructure the financial regulatory system.

Thursday also brings a General Motors bankruptcy hearing in New York.

Friday: State-by-State unemployment reports are due in the morning.

The Dow Jones industrial average (INDU) lost 30 points, or 0.3%, an hour into the session, after ending the previous session at a five-month high.

The S&P 500 (SPX) index slipped more than six points, or 0.7%, after ending the previous session at a seven-month high.

The Nasdaq composite (COMP) fell 26 points, or 1.4%, after ending the previous session at an eight-month high.

Stocks ended higher Thursday after the day's economic news fueled bets that the recession is waning. However, most of the advance lost steam in the last hour of trading.

Markets have rallied for three months straight, since bottoming March 9. In that time, the Dow has gained 34%, the S&P 500 40% and the Nasdaq 47%, as of Thursday's close.

But stocks have struggled this week as rising Treasury yields and higher commodity prices have fueled worries that inflation could choke off any early signs of recovery.

On Friday, the benchmark 10-year note yield fell to 3.85%, down from 4% early Thursday morning. The yield touched 4% during Wednesday's session for the first time since last October.

Economy: Consumer sentiment was little changed in early June, falling just shy of forecasts. The University of Michigan's consumer sentiment index rose to 69 from 68.7, versus forecasts for a rise to 69.5.

Import prices jumped 1.3% in May, in line with forecasts. It was the largest monthly increase since last July, according to a Labor Department report released Friday morning. The increase was due largely to a jump in petroleum prices. Prices rose 1.1% in April.

Year-over-year import prices fell 17.6%, suggesting that inflation fears are not yet being realized.

Export prices rose 0.6% in May versus forecasts for a gain of 0.4%. Prices rose 0.4% in April.

Companies: BlackRock (BLK, Fortune 500) is buying BGI, the investment unit of British bank Barclays (BCS), in a $13.5 billion cash-and-stock-deal that will create the world's largest money manager.

Other markets: In global trading, most Asian markets ended higher. European markets fell in afternoon trading.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for July delivery fell 82 cents to $71.86 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery fell $21.30 to $940.70 an ounce. 

NEW YORK (CNNMoney.com) -- Stocks ended modestly higher Thursday, with all three major gauges closing at multi-month highs after the day's economic reports fed hopes that a recovery is brewing.

The Dow Jones industrial average (INDU) gained nearly 32 points, or 0.4%. Despite falling short of its 2008 finish, the index ended at its highest level since Jan. 6.

The S&P 500 (SPX) index added over 5 points, or 0.6% and closed at its highest point since Nov. 5.

The Nasdaq composite (COMP) climbed 9 points, or 0.5% and closed at the highest point since Oct. 6.

Stocks have been on the rise since bottoming March 9, with the Dow up 34%, the S&P 500 up 40% and the Nasdaq up 47%, as of Thursday's close.

But stocks have seesawed this week after rising Treasury yields and higher commodity prices sparked worries about inflation hampering a burgeoning recovery.

Thursday restarted the advance, as a rise in retail sales and a bigger-than-expected dip in jobless claims raised hopes that the pace of the recession is slowing. But the early advance lost momentum; the S&P 500 failed to hold on after briefly hitting a key level that traders and other market pros watch.

Nonetheless, the trend remains upward.

"The market keeps chugging along and it's pretty impressive," said Michael Church, president at Addison Capital. "None of the economic data screams outright recovery, but the market tends to move first."

He said that the runup has been liquidity driven, with investors not wanting to miss the boat, even after three months of gains. However, the pace of the advance has been slowing lately and that's bound to continue.

He said that the immediate concern over the next few weeks is the rise in interest rates.

On Friday, May import and export prices are due from the Labor Department. Also, the University of Michigan releases its June consumer sentiment index.

Bonds: A comparatively strong 30-year bond auction Thursday helped temper worries about pricing pressures, at least in the short term.

Treasury prices jumped, lowering the corresponding yields. The benchmark 10-year note yield fell to 3.85%, down from 4% early Thursday morning. The yield touched 4% during Wednesday's session for the first time since last October.

Economy: Retail sales climbed 0.5% in May, the Commerce Department reported. The report was in line with forecasts and showed an improvement from April, when sales fell a revised 0.2%.

Sales excluding autos rose a bigger-than-expected 0.5%. Economists surveyed by Briefing.com thought sales without volatile autos would rise 0.2% after falling a revised 0.2% in April.

But the report mostly reflects the recent rise in gas prices, rather than any new direction for the consumer, said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.

"Basically the consumer is still dead in the water," he said. "We're not going to see a rise in consumer spending in the second quarter like we did in the first. Household balance sheets are a disaster."

A Federal Reserve report showed Americans saw $1.3 trillion in wealth disappear in the first quarter of this year, as home values declined and the stock market tanked. But the rate of decline was slower than last year. In the fourth quarter alone, $5.1 trillion in wealth disappeared, the biggest quarterly plunge since the Fed started tracking data in 1951.

Another report showed that foreclosure filings fell 6% in May from April, but still saw the third-worst month on record. The report showed that one of every 398 households received some kind of filing in the month, including notices of default, scheduled auctions or bank repossession.

The number of Americans filing new claims for unemployment fell 24,000 to 601,000 last week, according to a Labor Department report released Thursday morning. Economists though claims would dip to 615,000.

However, continuing claims, the number of Americans who have been receiving benefits for a week or more, rose to 6,816,000 from a revised 6,757,000 in the previous week.

BofA: Bank of America (BAC, Fortune 500) CEO Ken Lewis stressed Thursday that pressure from the government played a key role in the company's decision to complete its purchase of Merrill Lynch last year.

Lewis said the federal government threatened to remove management or board members if the company went back on its promise to buy Merrill, even though Merrill's financial state was deteriorating.

Other markets: In global trading, Asian markets ended mixed and European bourses ended higher.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for July delivery rose $1.35 to settle at $72.68 a barrel on the New York Mercantile Exchange, the highest close since October.

COMEX gold for August delivery rose $7.30 to settle at $962 an ounce.

Market breadth was positive and volume on the New York Stock Exchange was light for the fourth session in a row. On the New York Stock Exchange, winners beat losers three to two on volume of 1.22 billion shares. On the Nasdaq, advancers topped decliners nine to five on volume of 2.49 billion shares.

The Dow Jones industrial average rose 77 points, or 0.9%, the S&P 500 gained 8 points, or 0.8%, and the Nasdaq composite rose 15 points, or 0.9%.

"We're getting some good numbers here," said Anthony Conroy, head trader at BNY ConvergEx Group, referring to government reports on retail and job market activity.

Conroy said the positive data was fueling the perception that this is "not a bull market rally," but a more substantial rally, based on stronger fundamentals. He said that the stock surge was being fueled by traders who had sat on the sidelines during earlier rallies, and were now trying to make up for what they had missed.

U.S. stocks fell slightly Wednesday as Treasury yields and crude prices climbed, igniting inflation worries.

Retail: The government reported that retail sales rose 0.5% in May, as expected in a consensus forecast from Briefing.com, after falling a revised 0.2% the prior month.

Jobs: Initial jobless claims fell 24,000 to 601,000 in the week ending June 6, the government said.

Claims were expected to have slipped slightly to 615,000, according to the Briefing.com consensus forecast.

Banks: Bank of America (BAC, Fortune 500) CEO Ken Lewis was testifying before lawmakers about the government's role in ensuring that the bank complete its controversial merger with Merrill Lynch.

New e-mails added more insight into the heated talks and indicate the Federal Reserve strong-armed BofA into completing the deal last year.

Bonds and oil: The benchmark 10-year Treasury yield was up to 3.97% from 3.95% late Wednesday. The yield reached 4% during Wednesday trading for the first time since last fall.

Crude prices topped $72 a barrel after the International Energy Agency raised its 2009 outlook for oil demand.

World markets: In Asia, stocks mostly finished higher, although Japan's Nikkei ticked lower. European shares edged higher in midday trading.

Currency: The dollar fell versus the major international currencies, including the euro, the yen and the British pound. 

NEW YORK (CNNMoney.com) -- Stocks cut losses, but still ended lower Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort.

The Dow Jones industrial average (INDU) lost 24 points, or 0.3%, according to early tallies. The S&P 500 (SPX) index lost almost 3 points, or 0.4%. The Nasdaq composite (COMP) lost 7 points, or 0.4%.

Treasury prices slumped, boosting the corresponding yields. The benchmark 10-year note fell 22/32 and its yield rose as high as 4% before ending the session at 3.94%, up from 3.86% Tuesday.

Yields rose after the government's sale of $19 billion in 10-year notes saw only ho-hum demand -- and Russia said it will cut its share of U.S. debt.

The spiking bond yields pressured stocks. But equity investors managed to recover from bigger losses by the close, a positive on a choppy day, said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

"We've been seeing these (electronic) buy programs kick in at around 3:15 each day, with money getting put to work on down days," he said.

While this was encouraging, he said it was also telling that daily trading volume each day this week -- on the New York Stock Exchange -- has been among the lightest of the year.

On the New York Stock Exchange Wednesday, losers beat winners eight to seven on volume of 1.22 billion shares. On the Nasdaq, decliners topped advancers eight to five on volume of 2.4 billion shares.

Post rally, investors meander: Stocks are coming off the best 3 month run since 1982, as measured by the Dow industrials, and the best since the 1930s, as measured by the S&P 500.

The run up from the lows of March 9 has lifted the Dow over 30%, the S&P nearly 39% and the Nasdaq around 45%.

Although the momentum going forward is still with the bulls, new worries have surfaced over the last few days, said John Wilson, chief technical strategist at Morgan Keegan.

"The concern has been that the bond market is worried about inflation and the rise in commodity prices is adding to that," Wilson said. "There's a little bit of a worry that this will dampen what is hopefully the start of a recovery."

The concerns about pricing pressure overshadowed any relief Wednesday about Chrysler's completed deal with Fiat and Home Depot's improved forecast.

U.S. light crude oil prices climbed as high as $71.79 a barrel, rising along with the price of gold and other commodities.

Commodity prices have been rallying lately, due to the weak dollar and bets that the economic recovery will drive demand for so-called hard assets. But the rise in commodity prices also added to worries over inflation.

Concerns that rising borrowing costs could derail a tentative economic recovery have dragged on sentiment over the last few sessions.

Chrysler: Italian automaker Fiat has closed a deal to buy the good assets of the bankrupt automaker, after the Supreme Court cleared the way for the deal late Tuesday.

Fiat will take a 20% stake in the company to start with, but that holding can increase to 35% if the company reaches certain goals. The new company -- called the Chrysler Group -- will be majority owned by the United Auto Workers union. The U.S. and Canadian governments will also own stakes.

Chrysler is expected to start operating immediately.

Banks: On Tuesday, the government said 10 of the biggest banks were well-enough capitalized to pay back a collective $68 billion in loans received last fall at the height of the financial crisis.

The list included American Express (AXP, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Goldman Sachs (GS, Fortune 500).

On Wednesday, the Obama administration dropped its plan to limit salaries at firms that have taken bailout money and instead introduced legislation to give shareholders more say in executive pay. Washington attorney Kenneth Feinberg was named the new "pay czar."

Retail: Home improvement retailer Home Depot (HD, Fortune 500) said it now expects full-year earnings in a range of flat to down 7%, versus its earlier guidance for a decline of 7%. Shares were little changed.

Economy: The Fed released its periodic "beige book" reading of the economy in its 12 districts. The report showed the economy remained weak or got weaker between mid-April and early May, although five of the districts said there are signs the pace of the recession is slowing.

Another report showed the U.S. fiscal year deficit is now near $1 trillion after a $189.7 billion shortfall in May.

The April trade balance widened to $29.2 billion from a revised $28.5 billion in March, the Census Bureau reported. Economists surveyed by Briefing.com thought it would widen to $28.7 billion.

Other markets: In global trading, Asian and European stocks ended higher.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for July delivery rose $1.32 to settle at $71.33 a barrel on the New York Mercantile Exchange, building on earlier gains after the government's weekly inventory report showed a surprise plunge in crude supplies.

COMEX gold for August delivery settled at $954.70 an ounce, unchanged from Tuesday.

A spike in the 10-year note yield to a 7-month high dragged on stocks.

The Dow Jones industrial average (INDU) gained 18 points, or 0.2%, nearly an hour into the session. The S&P 500 (SPX) index was little changed. The Nasdaq composite (COMP) lost 11 points, or 0.6%.

U.S. light crude oil prices climbed as high as $71.65 a barrel, rising along with the price of oil, gold and other commodities. Commodity prices have been rallying lately, due to the weak dollar and bets that the economic recovery will drive demand for so-called hard assets.

The rise in commodity prices gave a boost to the underlying stocks, such as Dow components Exxon Mobil (XOM, Fortune 500) and Chevron (CVX, Fortune 500). But weakness in technology shares dragged on the market. Transportation stocks - sensitive to higher fuel costs - slumped as well.

Tech shares rallied Tuesday after Texas Instruments (TXN, Fortune 500) lifted its quarterly profit outlook. But the broader market was little changed even after a positive Treasury auction cooled worries about rising borrowing costs. Additional auctions are scheduled for Wednesday and Thursday.

Concerns that rising borrowing costs could derail a tentative economic recovery have dragged on sentiment over the last few sessions. On Wednesday, the ten-year note yield again surged to a 7-month high.

Chrysler: Italian automaker Fiat has closed a deal to buy the good assets of the bankrupt automaker, after the Supreme Court cleared the way for the deal late Tuesday.

Fiat will take a 20% stake in the company to start with, but that holding can increase to 35% if the company reaches certain goals. The new company -- called the Chrysler Group -- will be majority owned by the United Auto Workers union. The U.S. and Canadian governments will also own small stakes.

Chrysler is expected to start operating immediately.

Banks: On Tuesday, the government said 10 of the biggest banks were well-enough capitalized to pay back a collective $68 billion in loans received last fall at the height of the financial crisis.

The list included American Express (AXP, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Goldman Sachs (GS, Fortune 500).

The Obama administration has dropped its plan to put a limit on salaries at firms that have taken bailout money, according to reports Wednesday. A compromise is expected to be announced later in the day.

Retail: Home improvement retailer Home Depot (HD, Fortune 500) said it now expects full-year earnings in a range of flat to down 7%, versus its earlier guidance for a decline of 7%. Shares gained 1%.

Economy: The government announced that the trade balance showed a deficit of $29.2 billion in April, just slightly more than the forecast from Briefing.com consensus of economist opinion. The deficit was influenced by higher oil prices.

World markets: In Asia, stocks rose. European shares rallied in afternoon trading.

Currency: The dollar rose versus the yen and the euro. 

At 9:05 a.m. ET, Dow Jones industrial average, S&P 500 and Nasdaq 100 futures were higher, recovering from earlier lows.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Art Hogan, chief market strategist at Jefferies & Co., said the potential rally is based on expectations for inflation in such "hard assets" as oil, which is now selling for more than $71 a barrel, as well as coal, steel, copper and natural gas.

Hogan said that inflation is "going to be a net positive for stocks with hard assets."

Chrysler-Fiat: The Supreme Court decided Tuesday to not hear an appeal from a group of Indiana pension funds aimed at blocking the deal that allows Chrysler to emerge from bankruptcy.

The decision clears the way for Chrysler to sell most of its assets to Italian carmaker Fiat.

Banks: The Obama administration dropped its plan to cap salaries at bailout recipient companies, and is expected to announce a compromise Wednesday, the Wall Street Journal reported.

Retail: Home Depot (HD, Fortune 500), the biggest home improvement retailer in the world, raised its earnings forecast to a range of flat to down 7%, compared to the prior guidance of a 7% decline. On an adjusted basis, the retailer now expects a decline of 20% to 26% in earnings per share from continuing operations, compared to the prior forecast of a 26% decline.

Economy: Readings on the trade balance, Treasury budget and the Fed's Beige Book of economic conditions, are on tap.

The government announced that the trade balance showed a deficit of $29.2 billion in April, just slightly more than the forecast from Briefing.com consensus of economist opinion. The deficit was influenced by higher oil prices.

Oil: Shares of oil firms are likely to be on the move amid the surge in oil prices. Crude prices climbed above $71 a barrel.

At 10:30 a.m. ET, the U.S. Energy Department is due to release its weekly report on fuel supplies.

World markets: In Asia, stocks rose. European shares rallied in midday trading.

Currency: The dollar rose versus the yen, but slipped against the euro and the British pound. 

NEW YORK (CNNMoney.com) -- The Nasdaq rallied Tuesday, while the broader market was little changed, after the government said 10 of the largest banks could pay back loans and after a positive Treasury auction cooled worries about rising borrowing costs.

The Dow Jones industrial average (INDU) lost 1 point. The S&P 500 (SPX) index added 3 points, or 0.4%.

The Nasdaq composite (COMP) added 18 points, or 1%, with technology shares rising after chipmaker Texas Instruments (TXN, Fortune 500) boosted its quarterly sales and earnings outlook late Monday.

Stocks were mixed after the government said 10 banks were well-enough capitalized to pay back a collective $68 billion in loans. But stocks moved to the highs of the session after a strong response to the government's auction of $35 billion in three-year securities.

The combination of the auction results and the boost from Texas Instruments was helping stocks Tuesday, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

"TI really increased their guidance, which was good, but we're going to need to see more fundamental news like that to keep us moving higher after a big thee-month rally," he said.

Stocks have been on the rise since early March, with the Dow having jumped more than 32%, the S&P gaining 39% and the Nasdaq surging 46%, as of Monday's close.

That marked the Dow's best 3-month run since 1982 and the S&P 500's best run since the 1930s.

The gains have been sparked by a series of not-as-bad-as-expected economic reports and growing investor sentiment.

Although stocks have been drifting a bit and could see more of a pullback over the next few weeks, the tone remains positive, said Steven Goldman, market strategist at Weeden & Co.

"Overall, I think stocks will continue to find buyers on pullbacks and the trend will remain up," he said.

Goldman said that historically, stocks tend to gain six months ahead of the end of a recession and for the first three months after a recession is over. Using data that goes back to 1901, he found that the S&P was always higher in the three months after a recession ended.

The April trade balance from the Census Bureau is due Wednesday morning before the start of trade. About an hour into the session, the weekly oil inventories report is due, from the Energy Information Administration.

Wednesday afternoon brings a report on the May treasury budget and also the Federal Reserve's "Beige Book" reading on economic activity.

Banks: The U.S. government said Tuesday morning that 10 banks that received TARP loans last fall can repay a total of $68 billion to the government.

The news shows that the fear of an implosion has subsided and that the risk factor in financial markets has diminished, Goldman said.

Morgan Stanley (MS, Fortune 500), American Express (AXP, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500), Bank of New York Mellon (BK, Fortune 500), BB&T (BBT, Fortune 500), Capital One (COF, Fortune 500), Northern Trust (NTRS, Fortune 500), State Street (STT, Fortune 500) and US Bancorp (USB, Fortune 500) have confirmed that they are allowed to repay loans.

But only AmEx, BB&T and Capital One shares posted solid gains.

Banks that were stress-tested earlier this year should undergo another round of tests, a U.S. watchdog group said Tuesday.

The Congressional Oversight Panel said that recent signs that the recession could be worsening show the tests did not go far enough. In particular, the group pointed to the May employment report, which showed a slower pace of job losses but also that the unemployment rate rose to a 26-year high of 9.4%.

On the move: The gains in Texas Instruments spread to other large chip makers, including Intel (INTC, Fortune 500) and Advanced Micro Devices (AMD, Fortune 500).

The Philadelphia Semiconductor (SOX) index rose 4.5%.

General Motors (GMGMQ) rallied 24% after it said that the former chairman and CEO of AT&T will be its new chairman when it emerges from bankruptcy later this summer.

The Dow ended near unchanged, as strength in tech and commodity shares was tempered by weakness in aerospace and defense names Boeing (BA, Fortune 500) and United Technologies (UTX, Fortune 500).

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 1.06 billion shares. On the Nasdaq, advancers topped decliners eight to five on volume of 2.17 billion shares.

Chrysler: The Supreme Court delayed the sale of Chrysler's assets to Italian automaker Fiat, in a late-Monday move that threw a wrench into the automaker's plans for a quick exit from bankruptcy.

Under terms of the agreement, Fiat can ditch the deal if it is not finished by June 15. However, the company said Tuesday that it won't walk away from Chrysler.

In addition, Chrysler returned to bankruptcy court Tuesday to try to get a judge to approve the closing of 789 of its dealerships.

Economy: Wholesale inventories fell 1.4% in April, the Census Bureau reported, after falling 1.8% in the previous month. Economists surveyed by Briefing.com expected a decline of 1.1%, on average.

Bonds: Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 3.86% from 3.88% late Monday. Treasury bond prices and yields move in opposite directions.

Treasury sells $19 billion of 10-year debt tomorrow and $11 billion of 30-year bonds on Thursday.

The recent rise in the 2-year note has left the security nearly 1 percentage point above the fed funds rate, raising bets that the Federal Reserve will have to raise interest rates before the end of the year, something stock investors don't like.

And the spike in the 10-year has caused worries that it may stunt a burgeoning recovery, as the longer-term bond yields are tied to mortgage rates. Higher mortgage rates could dissuade homebuyers at a time when the housing market is just starting to stabilize in some areas.

Other markets: In global trading, Asian markets ended lower and European markets ended mixed.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for July delivery rose $1.92 to settle at $70.01 a barrel on the New York Mercantile Exchange, settling above $70 a barrel for the first time since November.

COMEX gold for August delivery rose $2.20 to settle at $954.70 an ounce. 

The Dow Jones industrial average (INDU) was little changed 45 minutes into the session, while the S&P 500 (SPX) index gained 1 point, or 0.1%.

The Nasdaq composite (COMP) added 11 points, or 0.6%, with technology shares rising after chipmaker Texas Instruments (TXN, Fortune 500) boosted its quarterly sales and earnings outlook late Monday.

Stocks have been on the rise since early March, with the Dow having risen over 32%, the S&P 39% and the Nasdaq 46%, as of Monday's close.

The gains have been sparked by a series of not-as-bad-as-expected economic reports. However, recently, the focus has shifted to whether rising Treasury bond yields could put a damper on a recovery, forcing the Federal Reserve to raise interest rates.

Chrysler: The Supreme Court delayed the sale of Chrysler's assets to Italian automaker Fiat, in a late-Monday move that threw a wrench into the automaker's plans for a quick exit from bankruptcy.

Under terms of the agreement, Fiat can ditch the deal if it is not finished by June 15. However, the company said Tuesday it won't walk away from Chrysler.

Banks: The U.S. government said that 10 banks that received TARP loans last fall will repay a total of $68 billion to the government. Among the banks that announced they are repaying loans are Morgan Stanley (MS, Fortune 500) and Capital One (COF, Fortune 500).

JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and American Express (AXP, Fortune 500) are among the banks that reportedly have also gotten the OK to repay the loans.

A U.S. government watchdog group said Tuesday that banks that were stress tested earlier this year should undergo another round of examinations.

Economy: Wholesale inventories fell 1.4% in April, more than the 1.1% drop expected in a consensus of economists surveyed by Briefing.com.

Treasurys: Government debt prices edged higher, as the government prepares to buy and sell debt this week. The Treasury is set to auction $65 billion this week, including 3-year and 10-year notes and the reopening of 30-year bonds.

World markets: In Asia, stocks retreated. The mood was more upbeat in Europe, where major markets were modestly higher.

Money and oil: The dollar was lower versus the euro and higher against the yen. The price of oil rose $1.38 a barrel to $69.47. 

NEW YORK (CNNMoney.com) -- Stocks cut losses Monday, ending mixed, as investors scooped up bank and consumer shares and kept an eye on Treasury bond yields, the dollar and commodity prices.

After the close, the Supreme Court granted a stay in the sale of Chrysler's assets to Italian automaker Fiat, at the behest of a group of shareholders. The move delays Chrysler's exit from bankruptcy, which had been expected to occur as soon as Monday.

The Dow Jones industrial average (INDU) ended just above unchanged and the S&P 500 (SPX) index ended just below unchanged. The Nasdaq composite (COMP) lost 7 points or 0.4%.

All three major indexes had slumped through the session, before turning higher near the close and ultimately ending mixed.

The late-session turnaround was positive, but deceptive, in that the market breadth numbers remained negative, said Donald Selkin, chief market strategist at National Securities. He was referring to the fact that more shares fell than gained, on both the Nasdaq and New York Stock Exchange.

He said that going forward, it's going to be difficult for the major indexes to push much higher.

"We saw some resiliency today, but I think the market is going to be laboring under the perception that the Federal Reserve is going to be forced to raise rates," Selkin said.

That's partly because Treasury yields have been rising, with the 2-year note yield now more than a full percentage point above the fed funds rate, which has been near zero since December.

Meanwhile, the 10-year note is edging closer to 4%, a level not seen since October. The spike has raised worries about the recovery hitting roadblocks before it's barely begun.

Some optimism about the bank sector Monday helped to counter worries about inflation, the dollar and the spike in Treasury bond yields, said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

"The banks are up because the rumor is that there are going to be nine banks that they allow to pay back TARP funds," Rovelli said.

The government will let the banks know this week, perhaps as soon as Tuesday morning, which ones they deem to be sufficiently capitalized to pay back the TARP funds received last fall.

Monday is the deadline for plans to be submitted by banks that need to raise additional cash as a result of the government's stress tests.

Stalling after the rally: Stocks were weaker through most of Monday's session as investors showed caution after a rally that has propelled the Dow off of 12-year lows hit in early March. The Dow has risen in 11 of the last 13 weeks, climbing 32.2% as of Friday's close. That's the blue-chip average's best 13-week run in 26 years.

The other major indexes have also rocketed since March 9. Since hitting a more than 12-year low, the S&P has gained 39% as of Friday's close. The Nasdaq has rallied 45.8% as of Friday's close, since bouncing off of a 6-year low.

Pacing a typical post-rally retreat is the start of a shift in investor perception, said Jeffrey Kleintop, chief market strategist at LPL Financial.

He said the spate of not-as-bad economic news, punctuated by last Friday's milder than expected job-loss report, has raised questions about whether the economy is healing faster than expected. If so, how will all the stimulus spending impact growth, and how will the government respond?

"The focus has switched to 'yes, things are turning around, but maybe more rapidly than expected, and what does that mean for inflation?'" he said.

Financials: Banks were in focus Monday. The 10 banks that were required to raise a collective $75 billion as a result of the government "stress tests" have to submit detailed plans by Monday.

Bank of America (BAC, Fortune 500), Morgan Stanley (MS, Fortune 500) and PNC Financial Services (PNC, Fortune 500) are among the companies that have already met or exceeded requirements.

In addition, the government is expected to announce which banks can pay back the TARP funds.

Most major bank stocks were higher, boosting the KBW Bank sector index by 1.3%.

Apple: On Monday afternoon, the tech behemoth introduced a faster version of its iPhone, lowered the price on its existing phone and offered details on its revamped operating system. Apple (AAPL, Fortune 500) shares ended modestly lower.

Company news: Fidelity and private-equity firm KKR are teaming up to give customers of the mutual fund company access to initial public offerings of KKR companies.

The global airline industry is likely to lose $9 billion this year due to weaker demand and the impact of the recession, according to trade group the International Air Transport Association.

Among stock movers, consumer shares advanced, including Dow components' Home Depot (HD, Fortune 500) and Walt Disney (DIS, Fortune 500).

McDonald's shares dipped after the company reported May sales at stores open a year or more rose 5.1%, versus a rise of 6.9% in April.

Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 1.08 billion shares. On the Nasdaq, decliners topped winners eight to five on volume of just under 2 billion shares.

Other markets: In global trading, Asian markets ended mixed and European markets ended lower.

In currency trading, the dollar gained versus the euro and fell against the yen.

U.S. light crude oil for July delivery fell 35 cents to settle at $68.09 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery fell $10.10 to settle at $952.50 an ounce.